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Jan. 17, 2011 – A challenging side effect of good snowfall

January 17, 2011

Even with some dealers saying the good ol’ days are back with lots of snow and an uptick in the economy, there is a new challenge out there for some.

Thanks to minimal snowfall in previous years, many snowmobilers were out of the buying market longer than in previous decades. Now with abundant snowfall in some parts of the country, snowmobilers are returning to dealerships, but at times are experiencing sticker shock simply because of their time away from the showroom floor.

Returning to market

Seeing snowmobilers getting back into the recreation, Paul Prentice, owner of Prentice Power Sports in Ontario, says new and used sled sales have been strong.

“Getting product is/will be a concern as virtually the entire Canadian network is experiencing the same thing,” Prentice said, referring to increased snowmobile sales. “In the sled world though, weather has more of a factor than the economy, and history has also shown that to be true.”

With snow levels strong in November and December, Prentice said they’re “seeing a large influx of new and returning customers. A lot of them are coming in buying used to avoid the high costs of new. Plus we’re not seeing the traditional trades.

“The fact the avid sledder has held off the past few years is showing to be true. The most common trade is in the 2004-’05 range, which shows they have waited the six and seven years instead of the two to three in the good ol’ days.”

Sticker shock

Of course nobody is complaining snowmobilers are returning to the market, but some dealers are facing the sticker shock reaction.

That’s nothing new to Eric Neuer, general partner of Oneonta Motorsports in Oneonta, N.Y. “Historically customers have been choking on (new sled) prices since I started business in 1996,” he said. “As far as new snowmobiles, I’ve never had anyone come in and say, ‘Oh that sounds reasonable.’ Most everyone who comes in is surprised about what they cost no matter what year it is.”

The sticker shock, however, has been more intense lately, says Neuer.

“They started wondering why a snowmobile cost more than their second car payment,” he said.

One of the most common methods dealers have used to help consumers get over the cost is the benefits of the technological improvements.

“It’s strange, but you know, (sticker shock) is not the factor with us that it seems to be south of the border,” Prentice said, referring to dealerships in the United States. “The new technology, especially in the Ski-Doo world with E-TEC, has so much benefit that it makes the sale much easier.

“The snowmobile customer is the biggest self-educating customer we have, and they read and research it all so much that they convince themselves the benefits from the technology are worth it.”

Jeff Kracl of B&B Cycle Sales in Norfolk, Neb., would agree.

“We have been telling (consumers) about improvements in durability, comfort, emissions with some success,” he said. “The best solution is to allow a demo ride on a new model. Some of our best sales have been with those that will spend even more than the cost of a new unit with the addition of a supercharger or turbocharger.”

Working around pricing

Some dealers who haven’t had much success with the technology factor have tried other approaches in helping consumers come out of the initial price shock.

“Sure, we’ve tried the increased technology approach; the things-cost-more-today-than-10-years-ago approach, and several others,” said Neuer of Oneonta. “But being unique, we have another approach we use from time to time.

“My brother likes to call our approach ‘The French waiter approach.’ We smile smugly as our customer is choking on the price we just smoothly delivered to him, and then say, ‘Perhaps we could show you something a little closer to your price range.’ Usually they get so mad, they buy one at a higher price just to show you they can afford it. Tongue poking through cheek.”

This approach is used sparingly, says Neuer.

“If you use it on people who don’t like it, they’re going to turn around and tell other people ‘Oh those guys are terrible. Don’t do business with them,’” he noted, and adds the dealership lives by humor and honesty.

Oftentimes people don’t understand how little money dealerships are making on snowmobiles, says Neuer.

“I’ve gone as far as opening my books and showing people what these things cost me,” he said. “I’m not the least bit embarrassed by that because my desperation to sell the stuff and get my floorplan down far exceeds any pride I might have had at any point. As long as it’s on the up and up, I’ll do it.”

With consumers price-sensitive and more apt to sticker shock, Neuer says often-times

customers are willing to drive 80-90 miles to get a sled if it means they can save $200.

“By and large if someone can save $200-$300 on a snowmobile, they’re more than willing to drive three or four hours to do so,” said Neuer. “It makes no economical sense whatsoever.”

Those few extra dollars, however, can toy with one’s mind, says Neuer.

“I do the cooking for Thanksgiving and Christmas at my house. That’s my favorite hobby outside selling snowmobiles,” he said. “I’m making a standing rib roast for Christmas, which is an incredibly expensive piece of meat, but everyone wanted one. There’s a town about an hour away that was advertising it for $4.99 per pound. I entertained the notion of driving an hour each direction to save $2 a pound on a piece of meat. My wife said, ‘You’re out of your mind.’ I would have saved $35, and the idea of saving that money was more infectious than changing the menu.

“It popped into my head that people who are looking to buy snowmobiles are looking at the same sort of thing.” PSB